Business method for obtaining efficient and low cost financing for business transactions

Abstract

The present invention discloses a new and attractive form of security which includes direct ownership of business revenues, and which can also include ownership of defined business assets. These business and investor benefits are derived from asset-based securities in which the underlying assets consist wholly or in part of revenue rights under one or more revenue-sharing agreements. These securities can also be based on a combination of business assets and revenue-sharing agreements.

1 . A method for creating at least one asset-based security, for which a backing therefor comprises the following steps: 
 providing at least in part one or more revenue-sharing agreements, said agreement specifying at least one continuing source of revenue;    transferring to owners of identified securities at least one of a portion, percent or fractional share of revenues resulting from the agreement, and which may include a specified term or period of duration for said agreement.    
     
     
         2 . The method for creating an asset based security as described in  claim 1 , further comprising the step of providing both a revenue-sharing agreement and at least one defined asset.  
     
     
         3 . A method for establishing a revenue sharing agreement comprising the steps of: 
 a) a first party providing at least one of a product or service, including at least one of all forms of communications, namely internet access, video, and broadband, natural gas, health care, energy, electricity and transportation, as well as processing, manufacturing, refining and distribution activities, including chemicals, metals, minerals, pharmaceuticals, petroleum products, food and beverages;    b) a second party providing at least one of financing or supplying, namely acting as a vendor, broker, factor, investment banker, Special Purpose Entity, intermediary or partner to said first party, the second party providing at least one of enabling, facilitating, expanding, supplementing and enhancing services, products or processes of the first party by providing at least one asset, including but not limited to machinery, equipment, hardware, software, systems or technology to the first party, wherein an effective period of a revenue sharing agreement is specified, said agreement incorporating the following provisions, terms and conditions:    a.  the second party retaining title to, and ownership of, the assets provided to the first party for the duration of said revenue sharing agreement, the second party retaining an option to liquidate all or part of his or an interest in the assets and said revenue sharing agreement by securitizing, transferring or selling the assets;    b.  the assets being subject to the exclusive use and control of the first party, and may be located or installed on the premises of the first party, and also may be integrated and combined with assets owned by the first party;    c.  the first party being responsible for the maintenance and operation of the assets provided by the second party, and for the marketing, administrative, operational, billing and collection functions related to the provision of products or services associated with or derived wholly or in part from the assets provided by the second party, including products or services provided jointly with assets owned by the first party;    d.  the second party directly assigning at least one of an agreed defined portion or percent of revenues derived from the services or products, as well as optionally from an otherwise specified group of products and services, the second party having an unqualified, direct and full ownership of such revenues; and    e.  an option to vary at least one of a defined portion and percent of such revenues assigned to the second party, or to substitute different products or services subject to revenue sharing;    f.  a portion or percent of the revenues defined above being based wholly or in part on the net book or market value of the assets provided by the second party, the net present value of the estimated revenues to be directly assigned to the second party, based on the effective date of the revenue sharing agreement or other agreed date, prevailing and anticipated commercial interest rates, administrative, financing, securitization and miscellaneous costs associated with the revenue sharing contract, including risk factors, the market value of the revenue sharing agreement;    g.  the assets to be provided by the second party being clearly specified, together with a stated schedule for their delivery and/or installation, if new;    h.  the revenue-producing products/services to be included in the revenue-sharing agreement being specified and estimates of the revenues to be derived from such services at various intervals within the revenue sharing agreement may be stated;    i.  a maximum revenue value to be assigned to, and received by, the second party within any given period may be specified;    j.  at least one clause/schedule included which provides for adjustments in the portion/percent of revenues directly assigned to the second party when services are added/deleted from the revenue sharing agreement by mutual agreement of the parties and, optionally, if revenues from the services specified above vary significantly from stated estimates;    k.  a specified maximum value of revenues assigned to, and received by, the second party during the term of the contract or during a specified period or by a specified date within the term of the contract may be defined, after which maximum is reached, the contract may be terminated without penalty by the first party, or may be terminated automatically; and    l.  title to and ownership of the subject assets provided by the second party passing to the first party at the termination of the contract.    
     
     
         4 . The method for establishing a revenue sharing agreement as described in  claim 3 , further comprising the step of providing a backing for asset-based securities to be issued and sold to individual investors or institutions, with such securities providing 1) a return of capital, 2) interest payments, including a risk premium, and 3) tax deductions for depreciation of the underlying assets when the asset title is held by securities owners.  
     
     
         5 . The method for establishing a revenue sharing agreement as described in  claim 3 , further comprising the step of the first party possessing an option to purchase the assets and revenue sharing rights of the second party, by assigning additional revenues or making payments to reach the maximum value, during at least one point in time during the term of the contract.  
     
     
         6 . The method for establishing a revenue sharing agreement as described in  claim 3 , further comprising the step of applying to assets initially owned by the first party, which assets are then purchased by the second party or another entity coincidentally with, or in conjunction with, the execution of the revenue sharing contract, such purchase providing a cash infusion to the first party.  
     
     
         7 . The method for establishing a revenue sharing agreement as described in  claim 3 , further comprising the step of financially restructuring a business entity, by significantly reducing the capital obligations, debt, fixed costs or outstanding stock of such a corporation or business, while providing it with a cash infusion and improved return on investment, said method operating through the selective sale to another entity of assets owned by such a corporation or business, and the coincidental or subsequent related execution of at least one revenue-sharing agreement under which the acquired assets remain in the possession and use of the corporation selling those assets, while that corporation and the acquiring party otherwise agree to revenue sharing under contract provisions and processes.  
     
     
         8 . The method for establishing a revenue sharing agreement as described in  claim 3 , further comprising the step of applying both to assets being newly provided by or through the second party and assets initially owned and operated by the first party and which are purchased by the second party but are retained for beneficial use by the first party under specified terms and conditions.  
     
     
         9 . The method for establishing a revenue sharing agreement as described in  claim 3 , further comprising the step of providing a Special Purpose Entity (SPE) to develop and market asset-backed securities in which rights under the revenue sharing agreement(s) in combination with title to a defined asset or assets provide some or all of the backing for such securities.  
     
     
         10 . The method for establishing a revenue sharing agreement as described  claim 3 , further comprising the step of providing a Special Purpose Entity (SPE) to develop and market asset-backed securities in which rights under revenue sharing agreement(s) and title to a defined asset or assets provide some or all of the backing for such securities, said SPE acting as a transferee in a transaction in which at least one of a vendor, supplier, factor, investment banker, intermediary or other party acts as a transferor of the revenue sharing agreement(s) rights and asset titles prior to securitization.  
     
     
         11 . The method for establishing a revenue sharing agreement as described in  claim 3 , further comprising the step of providing a Special Purpose Entity (SPE) to develop and market asset-backed securities in which rights under revenue sharing agreement(s) and a title to an asset or assets provide backing for such securities, and in which the SPE acts as a transferee in a transaction in which the first party, a service provider or product provider, acts as a transferor of the revenue sharing agreements(s) prior to securitization.  
     
     
         12 . The method for establishing a revenue sharing agreement as described in  claim 3 , further comprising the step providing at least one of an initial Public Offering (IPO) or a supplemental offering, in which investors are offered asset-backed securities including a revenue sharing agreement and selected assets, and which securities include rights to fractional shares of revenues related to that agreement.  
     
     
         13 . The method for establishing a revenue sharing agreement as described in  claim 3 , further comprising the step of providing at least one of an Initial Public Offering (IPO) or supplemental offering, in which investors are offered asset-backed securities, such asset backing including a) a revenue sharing agreement, and b) assets related to the production or derivation of such revenue, and which securities include rights to fractional shares of revenues related to the revenue sharing agreement, and fractional ownership of other assets backing the securities, such securities may also include a limited term of revenue sharing rights and asset ownership, and may also include a stated maximum value of revenues to be paid to or shared with securities owners.  
     
     
         14 . A method for establishing a revenue-sharing agreement which include the following: a) a first party, which provides services or products to the public or a selected clientele, and b) a second party, which provides or arranges financing or acts as a broker, factor, investment banker, Special Purpose Entity, intermediary or partner to the first party, wherein an effective period of a revenue-sharing agreement is specified, said method further comprising the steps of: 
 a. the second party retaining title to the revenue-sharing agreement and, optionally, liquidating at least part of an interest in such agreement by transferring, selling or securitizing the interest;    b. the first party being responsible for at least one of marketing, administrative, operational, billing and collection functions related to the provision of products or services included in the revenue-sharing agreement;    c. the second party directly assigning an agreed defined portion/percent of revenues derived from the services or products referenced above, or from an otherwise specified group or alternative group of products and services, and having an unqualified, direct and full ownership of such revenues;    d. varying, at times during the term of the contract, a defined portion or percent of such revenues assigned to the second party or substituting different products or services subject to revenue sharing;    e. directly assigning to the second party the portion or percent of the revenues defined in (c) based at least in part on the net present value of the estimated revenues, based on the effective date of the revenue-sharing agreement or other agreed date, prevailing and anticipated commercial interest rates, administrative, financing;    f. specifying the revenue-producing products or services to be included in the revenue-sharing agreement and estimating the revenues to be derived from such services at various intervals within the revenue-sharing agreement may be stated;    g. maximizing revenue values to be assigned to, and received by, the second party within any given period may be specified;    h. adjusting a portion or percent of revenues directly assigned to the second party when services are added or deleted from the revenue-sharing agreement by mutual agreement of the parties and, optionally, if revenues from the services specified under in the agreement vary significantly from stated estimates; and    i. establishing a specified maximum value of revenues assigned to, and received by, the second party during the term of the contract, after which the contract may be terminated without penalty by the first party, and optionally may be terminated automatically.    
     
     
         15 . The method for establishing a revenue sharing agreement as described in  claim 14 , further comprising the step of aggregating and pooling revenue sharing rights under one or more agreements to provide the backing for asset-based securities to be issued and sold to individual investors or institutions, such securities providing 1) a return of capital, 2) interest payments, and 3) a risk premium.  
     
     
         16 . The method for establishing a revenue sharing agreement as described in  claim 14 , further comprising the step of the first party having an option to purchase the revenue sharing rights of the second party, by assigning additional revenues or making payments to reach a stated maximum value at one or more times during the term of the agreement.  
     
     
         17 . The method for establishing a revenue sharing agreement as described in  claim 14 , further comprising the step of financially restructuring a business entity by securing a cash infusion to significantly reduce capital obligations, debt, fixed costs or outstanding shares through the execution and sale of the at least one revenue-sharing agreement to thereby secure a cash infusion for such purposes.  
     
     
         18 . The method for establishing a revenue sharing agreement as described in  claim 14 , further comprising the step of creating a Special Purpose Entity (SPE) to develop and market asset-backed securities in which rights under the revenue-sharing agreements provide some or all of the backing for such securities.  
     
     
         19 . The method for establishing a revenue sharing agreement as described in  claim 14 , further comprising the step of creating a Special Purpose Entity (SPE) to develop and market asset-backed securities in which rights under revenue-sharing agreements provide some or all of the backing for such securities, and in which the SPE acts as a transferee in a transaction in which a factor, investment banker, intermediary or other party acts as a transferor of the revenue sharing agreements and rights prior to securitization.  
     
     
         20 . The method for establishing a revenue sharing agreement as described in  claim 14 , further comprising the step of creating an SPE to develop and market asset-backed securities in which rights under revenue-sharing agreements provide the backing for such securities, and in which the SPE acts as a transferee in a transaction in which the first party acts as a transferor of the revenue sharing agreements prior to securitization.  
     
     
         21 . The method for establishing a revenue sharing agreement as described in  claim 14 , further comprising the step of providing at least one of an Initial Public Offering (IPO) or supplemental offering, in which investors are offered asset-backed securities, the securities including rights to fractional shares of revenues related to that agreement, the securities further optionally including a limited term of revenue sharing rights, and may also include a stated maximum value of revenues to be paid to or shared with securities owners.  
     
     
         22 . The method for establishing a revenue sharing agreement as described in  claim 14 , further comprising the step of creating at least one hedging agreement and which include the first party as the producer, provider, extractor or processor of commodities, products or services subject to, or expected to be subject to, significant fluctuations in price, including downward price fluctuations, and the second party, which purchases substantial quantities of such commodities, products or services for use in their operation or wishes to avoid or reduce the risk of upward movements in price levels of such commodities, products or services or others who wish to speculate in, or hedge against such price movements.  
     
     
         23 . The method for establishing a revenue sharing agreement as described in  claim 14 , further comprising the step of providing an alternative to sale and lease-back agreements, in which the first party sells an asset to the second party, receives cash or other compensation from such a sale, and receives operational control of, and responsibility for, such an asset in exchange for executing the revenue-sharing agreement, the new asset owner receiving ownership of a specified portion of the first party's revenues for a defined period, and may transfer or sell such revenue-sharing rights, and which rights may be securitized.  
     
     
         24 . The method for establishing a revenue sharing agreement as described in  claim 14 , further comprising the step of specifying specific products, services, processes or other sources and portions of related revenues to be shared, and therefore provide investors an option of investing directly and exclusively in such specific products, services or processes, including promising technologies and technologies which benefit the environment, including but not limited to coal gasification plants which reduce emissions, nuclear power plants, and hybrid locomotives, cars and trucks, so that investors need not invest in the total earnings and/or structure of the business involved, as reflected in stock offerings.  
     
     
         25 . The method for establishing a revenue sharing agreement as described in  claim 14 , further comprising the step of establishing an asset-backed security which is based wholly or in part on both the revenue-sharing agreement and an asset, wherein the asset is financed by the sale or securitization of the revenue-sharing agreement, thereby reducing the initial and continuing cost of such an asset, as compared to conventional financing, and therefore lowering the cost structure and price floor of the specific products, services or processes derived from or facilitated by such an asset, and permitting a more rapid and profitable marketing of such products, services or processes at less risk.  
     
     
         26 . A business method for obtaining efficient and low-cost financing for business-related transactions, including the steps of: 
 a. establishing an agreement on details of assets to be provided by a second party for the exclusive beneficial use of a first party,    b. establishing an agreed valuation for such assets;    c. developing a revenue-sharing agreement concerning at least one product or service associated with such assets or otherwise provided by the first party;    d. establishing an estimated flow of revenues to be derived from such products or services;    e. agreeing as to the share of said flow of revenues to be owned by said second party for the duration of the revenue sharing agreement;    f. agreeing that the first party will be responsible for operational, marketing, billing, collecting and administrative functions related to said products or services, and for a specified periodic transfer of revenues to the second party,    g. agreeing that the second party will retain title to and ownership of such assets until terms of the revenue sharing agreement have been satisfied and completed, and    h. agreeing that the first party retains exclusive beneficial use of such assets for the term of the revenue sharing agreement, and receives title to and ownership of such assets when terms of the contract have been completed.    
     
     
         27 . The method as described in  claim 26 , further comprising the step of including within said assets at least one component of equipment, machinery, systems or technology.  
     
     
         28 . The method as described in  claim 26 , further comprising the step of the second party selling or assigning revenue sharing rights and asset titles to a third party.  
     
     
         29 . The method as described in  claim 26 , further comprising the step of including the establishment of maximum values for revenues periodically assigned to the second party.  
     
     
         30 . The method as described in  claim 26 , further comprising the step of establishing a maximum cumulative value for revenues assigned to the second party, at which time the terms of the contract will be deemed complete and ownership of and title to the subject assets will pass to the first party.  
     
     
         31 . The method as described in  claim 26 , further comprising the step of assigning a portion of revenues assigned to the second party which will be automatically adjusted to conform to previously agreed estimates.  
     
     
         32 . The method as described in  claim 26 , further comprising the step of at least one of the second party and successor parties having the right to sell or securitize their revenue sharing rights.  
     
     
         33 . The method as described in  claim 26 , further comprising the step of the second party purchasing at least one asset of the first party, thereby providing a cash infusion to the first party, the first party compensating the second party with a revenue sharing agreement, which agreement subsequently may be resold or securitized.